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A spokesman for the Department for Communities and Local Government said councils "have been protected from further spending reductions" over the course of next year.

Local Authorities have been protected from further spending reductions for 2013-14, where the average spending power reduction is just 1.7%.

Government is helping councils grow their local economies through bespoke city deals, over £650 million New Homes Bonus, 24 Enterprise Zones and £770 million in Growing Places Funding.

In addition the Government is offering a £450 million third year's council tax freeze - potentially worth over £200 to Band D residents.

However, councils still account for a quarter of all public spending - £114 billion - so it is vital they continue to play their part tackling the inherited budget deficit by making all of the 50 sensible savings Ministers recommend, such as better procurement, greater transparency, using reserves more creatively and sharing back offices.

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Today's local government settlement confirms that local government will continue to bear the brunt of public sector cuts.

The cut of up to 8.8% provides no comfort for the next 12 months and, when added to further cuts in 2014/15, will present significant challenges at a time when local government should be focused on economic growth. This settlement is late and the uncertainty and speculation has only made a critical situation worse.

Budget constraints measured in the billions, particularly at a time of rising demand, will require strategic, not tactical, solutions.

Greater powers for local government to impact economic growth, to integrate and share across public services and greater recognition of the impact of welfare changes on local services would also help to support councils minimise the impact on the vulnerable through these challenging times.

Nevertheless, this settlement will increase the risk of more councils being financially unviable and focus needs to be given to how this market failure is managed. Very difficult local choices will now need to be made and local government should have the freedom to make these choices, even when setting council tax.

At the Nunsmoore centre in Newcastle, which provides child care support for children and parents from 0-12, there is a strong warning to the government to 'lay off our kids'

One mother Kerry Heron said;

"the cuts to local government are disgusting. My eldest will be without a play service next year thanks to these measures and I'm scared about what impact it's going to have on him - with almost all the libraries closing and the local pool too, where are our kids supposed to go?

"This is just going to lead to more antisocial behaviour and I worry what kind of future there is for my kids."

In Newcastle they are planning to start cutting back on not just discretionary services but statutory ones too.

An estimated 70% of council income will now be raised locally compared to 56% under the centrally-distributed "begging-bowl" Formula Grant system, according to the Communities and Local Government Department (DCLG).

From April 2013, councils can channel this greater local control into encouraging local jobs and local firms via a new business rate retention incentive that rewards them for growth. It could potentially add £10 billion to the economy by 2020.

– Communities and Local Government Department

The DCLG also published 50 examples of where it believed councils could save money, ranging from opening a coffee shop in libraries to scrapping the post of chief executive.

Councils must keep doing their bit to tackle the inherited budget deficit because they account for a quarter of all public spending and still get through over £114 billion of taxpayers' money each year.

Labour said that funding cuts to councils will have a huge impact on services, and claimed that Local Government Secretary Eric Pickles is "out of touch".

It is clear that he is living in a world of his own, because he simply does not understand the impact that his decisions on funding are having on the services and local people who use and rely upon them.

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Local Government Secretary Eric Pickles told the House of Commons that a small number of local authorities will require larger savings to be made, but he said that no council will face a loss of more than 8.8% of their total spending power thanks to a new efficiency support grant;

As the name implies, to qualify, councils will have to improve services to receive this grant. It is unfair on the rest of local government to expect them to subsidise other councils' failure to embrace modernity.

Mr Pickles said councils were "sitting on" a record £16 billion of reserves.